Vodafone Idea, India's third-ranked telecom operator and the only private telco which has not announced 5G plans, is likely to complete fundraising through a tie-up with banks, as reported by the New Indian Express, citing a senior Department of Telecommunications (DoT) official.
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The fundraising discussions are in the final stages and are expected to conclude in June 2023, and Vi will also launch its 5G services during the month, according to sources familiar with the matter.
Funding and Deployment
Vodafone Idea's ongoing discussions with banks to raise funds have been viewed positively by a senior Department of Telecommunications official. As a result, the telecom service provider is anticipated to make a fundraising announcement next month.
"As the company has maintained that it would start deploying its 5G network once the necessary funding is in place, I am expecting the company to start deploying 5G in June itself," the report quoted the official as saying.
License Fee Dues and Funding Challenges
Vodafone Idea has made progress in clearing its license fee dues for the third quarter and has made partial payment for the fourth quarter, according to the telecom department official. It is worth noting that Vodafone Idea has been striving to raise funds for more than two years without much success. However, the recent tie-up with banks brings renewed hope for the company's financial stability and future growth.
Also Read: Vodafone UK Not Confident About Vodafone Idea’s Ability to Make Future Payments
Competition and Revival Plan
The promoters of Vi (Vodafone Idea) made an investment of Rs 4,900 crores in the company during the previous year. Vi has previously stated that its inability to invest in the rollout of 5G technology is due to the government's delay in converting interest dues into equity.
While Vodafone Idea works towards launching its 5G network, its rivals Reliance Jio and Bharti Airtel have also outlined their plans to complete 5G deployments between the end of this year and early 2024.
Also Read: Vodafone Idea Expected to Unveil Revival Plan Soon: Report
Recently, the telecom secretary, K Rajaraman, reportedly has expressed expectations that Vodafone Idea will present its revival plan within a month. He also said the return of Aditya Birla Group chairman Kumar Mangalam Birla to the company's board has been seen as a positive step towards the company's recovery.
Government Support and Equity Conversion
In a significant move earlier this year, the Indian government decided to convert Rs 16,133 crore interest dues related to Vodafone Idea's deferred adjusted gross revenue (AGR) and spectrum usage charge (SUC) into equity. This decision aimed to alleviate the financial burden on the company and facilitate its revival process.
Also Read: Vodafone Idea Loses Over 2 Million Wireless Subscribers, Continuing a 23-Month Streak: TRAI
According to media reports, Finland's Nokia is in initial talks with Vi on 5G equipment supplies. "The government wants Vodafone Idea to survive in the country, or it will lead to duopoly in the telecom market, which is not good for the consumer," the report quoted the official.
While challenges remain, as the telco is losing subscribers month on month, the return of Kumar Mangalam Birla and government support through equity conversion highlight positive steps towards Vodafone Idea's revival and future growth in the Indian telecom market.